We humans are unique in having the capacity to reflect upon the past. Such thinking can provide insight as to how to best prepare for future decisions. This then provides the basis for a phenomenon known as ‘counterfactual thinking‘ (otherwise known as ‘what-if’ thinking), where we look back on our decisions and choices throughout life and imagine how things would have turned out differently if other decisions had been taken (Kray et al., 2010).

In the example above regarding a missed opportunity, regret (McCrea, 2008) and counterfactual thinking play out in full effect, rendering us unwilling to grab that same product after we miss the discount. The discount has reduced the perceived value of the product, and our expectation over its value is set at a new, lower baseline. Knowing this info and faced with the choice of buying it at full price, the study shows it’s highly unlikely that we’ll bite.